According to the 2011 census, India accounts for one of the highest country-wise youth populations.
- Approximately one-fifth of India’s total population comprises individuals between 15 to 25 years of age.
- This demography is expected to increase by 34.33% by the end of 2020, indicating how youths can be the driving force of India’s economy in the upcoming years.
It is also likely to reshape the country’s education industry. With a growing demand for higher education amongst individuals of all ages, the education sector is expected to witness a significant boost in a few upcoming years.
Thanks to the availability of convenient funding via education loans and supporting online tools such as education loan calculator, the fulfillment of education can catch up with its demand.
A look at funding for education
To meet this increasing demand, the Government of India has geared up its expenditure allocation on education from 3.8% of the GDP to almost 5% during FY 2019-20. Financial institutions also provide various types of loans to alleviate the monetary strain that accompanies higher education.
- Almost 2,50,000 students availed of education loans across India, as of March 2019.
Lenders from both public and private sectors offer such credits to eligible applicants. One can also seek secured loans, such as a loan against property, to fund more expensive, overseas degree certifications. Secured credits like property loans do not come with any end-use restrictions, which make them ideal to fulfil expenditures more than just for university admission. One can pay for his/her travel, residence, and occasional expenses with ease via these credits.
- Most private lenders (as well as PSUs) usually do not ask for any security or marginal requirement value for credits of up to Rs.4,00,000.
However, like any other form of advance, applicants should be well aware of the terms and conditions imposed by the financial institution. Rate of interest, tenure, EMI, and other factors should be carefully considered, if needed, and determined using an education loan calculator to structure a repayment plan beforehand. It will eliminate the risk of defaulting while helping them to pay off the debt without any hassle.
How to calculate loan EMIs with an education loan calculator?
The most convenient and easy way to determine repayment details is to use online tools such as a LAP EMI calculator. These compute the equated monthly instalments a borrower needs to pay every month. One only needs to adjust the total loan amount, rate of interest, and repayment tenure to determine instalments according to his/her repayment capability.
Depending on three primary variables, the principal amount (P), repayment tenure (N), and rate of interest (R), it calculates the EMIs via a standardised formula used to calculate the results –
[P x R x (1+R)˄N]/[(1+R)˄N-1]
Certain mortgage loan calculators even offer additional details at the same time, such as total repayment liability and total payable interest along with monthly EMIs. These can prove significantly helpful while planning a child’s education using an education loan.
Calculating these values before availing credit is crucial, as it allows a prospective applicant to plan his/her finances in advances. By determining the payable instalments, one can gauge the outflow of cash towards that particular debt, and manage finances accordingly. It can also prove helpful if they decide to foreclose the debt, as they can easily determine the total payable interest using an online LAP EMI calculator.
Why use a loan against property to fund higher studies?
Several reasons can be cited why one should fund higher education with secured credits like a loan against property. Let’s take a look –
High-value loan amount –
Secured credits like loans against property offer a substantial loan amount to eligible applicants, which can be as much as Rs.3.5 crore. Such loan amounts can prove helpful to meet overseas expenses to avail higher education, without burdening one’s personal finance.
Competitive rates of interest –
Another reason why one should choose a loan against property for education is that it offers competitive rates of interest. As it is a secured credit, the fund is disbursed against a mortgaged property. Hence, the risk associated with borrowing becomes significantly lower, which allows lenders to offer affordable interest rates.
Reputed financial institutions may provide pre-approved offers to existing customers, which reduces the hassles involved in applying for the credit. Such offers are available on several financial products, including loans against property and home loans. You can check your pre-approved offer by sharing only some essential details online.
Extended repayment tenor –
Loans against property are long-term debts, with repayment tenors ranging from 15 to 20 years depending on the financial institution. It helps keep a check on the amount payable every month, ensuring a borrower does not face any financial strain during repayment. One can also use an education loan calculator to determine the payable amount depending on the loan tenor, principal, and rate of interest.
Online EMI calculator is a handy and useful tool for individuals who wish to apply for credits like a loan against property for education. It offers a valuable insight into the essential details regarding the credits repayment liability, thus also allowing an individual to select the tenor and loan amount as per his/her repayment capability and eliminating any chances of defaulting.